Operations

Operations

Operations Update

2018 First Quarter Update

Tertiary Rift - Kenya

Exploration and Appraisal (Blocks 10BB and 13T)

Operational activity remains primarily focused in the South Lokichar basin. Work continues at both the Amosing and Ngamia fields, focused on collecting dynamic field data through extended production and water injection testing. The Ngamia-11 appraisal well (143 meters of net oil pay) is being utilized in a waterflood pilot test planned to be run throughout the first half of 2018. The waterflood pilot will include the previously drilled Ngamia 3, 6 and 8 wells. This pilot is designed to deliver a long-term assessment of the enhanced oil recovery that may be expected as a result of water injection. The waterflood pilot follows up the successful water injection testing program which was completed during the first half of 2017 on the Ngamia and Amosing fields. Additionally, extended well testing has been initiated in the Ngamia field, with produced oil from testing initially being stored in the field. A comprehensive set of results from this program is expected in the third quarter of 2018. To date, the initial results are positive.

The first production from the Early Oil Production System ("EOPS") is expected in the first half of 2018, subject to receiving all necessary consents and approvals for the transfer of crude oil to Mombasa by road. Discussions between local and national Governments are on-going with expectations of being able commence the trucking of oil in coming months.

Africa Oil Corp. has a 25% working interest in Blocks 10BB and 13T with Tullow Oil plc (50% and Operator) and Total S.A. (25%) holding the remaining interests.

Field Development (Blocks 10BB and 13T)

Since January 2018, work to deliver on the agreed development plan has been underway with strong alignment between the Government of Kenya and the Joint Venture Partners. The project remains on track for an FID in 2019. The initial development is planned to include a 60,000 to 80,000 barrels of oil per day (bopd) Central Processing Facility (CPF) and an export pipeline to Lamu, some 750 kilometers from the South Lokichar basin on the Kenyan coast. This approach is expected to bring significant benefits as it enables an early Final Investment Decision (FID) of the Amosing and Ngamia fields, taking full advantage of the current low-cost environment for both the field and infrastructure development, as well as providing the best opportunity to deliver first oil in a timeline that meets the Government of Kenya expectations. The installed infrastructure can then be utilized for the optimization of the remaining and yet to be discovered South Lokichar oil fields, allowing the incremental development of these fields to be completed in an efficient and low cost manner post first oil.

The initial stage is planned to include 210 wells through 18 well pads at Ngamia and 70 wells through seven well pads at Amosing, with a planned plateau rate of 60,000 to 80,000 bopd. Additional stages of development are expected to increase plateau production to 100,000 bopd or greater. The upstream baseline data collection for the Environmental and Social Impact Assessments ("ESIA") has commenced and the Front End Engineering and Design ("FEED") contract is expected to be awarded in the near term.

A Joint Development Agreement ("JDA"), setting out a structure for the Government of Kenya and the Kenya Joint Venture Partners to progress the development of the export pipeline, was signed on 25 October, 2017. The associated FEED and ESIA have commenced, as well as studies on pipeline financing and ownership, which are expected to continue throughout 2018.

Exploration Block 10BA

During 2017, the Joint Venture Partners entered the Second Additional Exploration Period on Block 10BA.

Cretaceous Anza Rift - Kenya

In Block 9, the Company continues to assess the results of its 2014 drilling program. The current exploration period expires in June 2018.

Tertiary Rift - Ethiopia

During the third quarter of 2015 in the Rift Basin Area Block, a 2D seismic program was completed, which consisted of approximately 600 kilometers of land and lake seismic. Source rock outcrops and oil slicks on the lakes have been identified in the block where there was previously no existing seismic or wells. The Government of Ethiopia has granted a 12 month extension to the initial exploration period which will expire in February 2019.